Cut Wasteful Spending in Emergency Supplemental Bill: Stop the $4 Billion Farm Subsidy Handout

June 5, 2006

Dear Speaker Hastert and Leader Pelosi:

Earlier this month several Members of Congress sent you a letter supporting the inclusion of special agriculture provisions in the conference version of H.R. 4939, the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006. On behalf of the hundreds of thousands of taxpayers represented by Taxpayers for Common Sense Action and the National Taxpayers Union, we strongly urge you NOT to include these unnecessary, costly, and counter-productive agriculture subsidies in the final version of the Emergency Supplemental bill. The President and House of Representatives have established a generous cap of $94.5 billion (including funding for avian influenza preparations) for H.R. 4939, and to include these agriculture provisions would make it more difficult to keep funding below this level.

At a cost of nearly $4 billon, the agriculture riders do little to aid the majority of farmers and represent the continuation of a broken commodity subsidy system which wastes taxpayer dollars, invites retaliatory tariffs on American exports, encourages the production of huge surpluses that lower world crop prices, and threatens to impede successful global trade negotiations.

Of particular concern is the use of increased direct payments as part of the agriculture package. As is common with commodity subsidies, only one-third of America’s farmers are even eligible to receive these bonus payments. Of those who are, the majority will receive crumbs while a handful of big producers will devour most of the pie. In fact, 10 percent of the bonus subsidy recipients will collect nearly 60 percent of the money.

In short, we agree with the President’s assessment that, “The 2002 Farm Bill was designed, when combined with crop insurance, to eliminate the need for ad hoc disaster assistance. In 2005, many crops had record or near-record production, and U.S. farm sector cash receipts were the second highest ever. Furthermore, the proposed level of assistance is excessive and may over-compensate certain producers for their losses.” Considering that Congress failed to offset the billions of dollars of new supplemental spending through other budget cuts, taxpayers simply cannot support efforts to increase America’s budget deficit by satisfying questionable demands for agricultural handouts.

Again, we encourage you to remove the $4 billion in ineffective agriculture hand-outs currently contained in the Senate-passed version of H.R. 4939. Doing so would help meet the $94.5 billion goal as well as send a strong message in anticipation of the 2007 Farm Bill that it is time to reexamine current policies that rely on government support instead of market forces to sustain the agriculture sector.